🏡 The Ultimate Guide for First-Time Homebuyers: Preparing Your Credit & Finances for Pre-Qualification

Trusted Mortgage Experts Serving All of Michigan | Powered by Arch Mortgage – North

Welcome to your first step toward owning a home — and your future.

Kirby and Angie Mortgage Team, we know that buying your first home can feel overwhelming. That’s why we’ve created this comprehensive guide to help you get credit-ready, financially prepared, and confidently pre-qualified — no guesswork required.

💵 Step 1: Prep Your Finances

Deposit Your Money Into a Bank Account
Cash stashed at home can’t be verified — and large, unexplained deposits could delay or derail your closing. Get your funds into a traceable account ASAP.

Start Saving Smarter
Put your coffee shop budget into savings and start building momentum. Even small, consistent deposits add up toward your down payment and reserves.

Pay Down Credit Cards & Small Loans
Lowering your revolving debt improves your debt-to-income ratio — a key piece of mortgage approval.

Don’t Refinance or Consolidate Debt Without Checking First
Talk to us before refinancing auto loans or consolidating credit. New inquiries can hurt your credit score or mess with your debt profile.

📈 Step 2: Get Credit-Ready

Check Your Score & Report
We’ll help you run a soft-pull credit report — no hard inquiry — to get a clear picture of where you stand and what’s helping or hurting your score.

Dispute Inaccuracies
Fix any errors or outdated information before applying. A cleaner report = a stronger application.

Avoid New Credit
Don’t open credit cards, finance furniture, or take out loans until after closing. One inquiry can change your approval terms.

Make All Payments On Time
Late payments are a fast track to a declined mortgage. Set up reminders or autopay to stay on track.

🔍 Step 3: Explore the Down Payment Assistance You Actually Qualify For

At Kirby and Angie Mortgage Team, we offer low and no down payment programs that help Michigan first-time buyers purchase without draining their savings — no MSHDA required.

Here are your real options:

• FHA Down Payment Assistance (DPA)
  Combine the flexible FHA loan with DPA to cover your required 3.5% down payment and some closing costs.

• 1% Conventional Loan Program
  Qualify with just 1% down — we’ll help you structure the loan with potential lender-matched contributions and grants.

• USDA/Rural Development (RD) Loans
  For eligible areas across Michigan, RD offers 100% financing with no down payment and low mortgage insurance.

We’ll help you determine eligibility and match you with the best program based on your credit, income, and location.

📝 Step 4: Start the Pre-Approval Process

Getting pre-approved is more than a formality — it’s how we turn your home search into a reality.

What We’ll Need:

1. A Complete Application

   • Full 2-year employment history (dates, employer names & addresses, titles, pay frequency)

2. Income Documents

   • Most recent 2 pay stubs

   • Last 2 years of W-2s

   • Year-end pay stub (if available)

3. Explain Any Employment Gaps

   • If you’ve had gaps in the last 2 years, we’ll document them clearly to prevent red flags.

4. Transparency Matters

   • Disclose all employers and income sources, even short-term ones. Omissions can delay or cancel your approval.

🏁 Step 5: What Happens After You’re Under Contract

Congrats! Once your offer is accepted, here are the upfront costs to expect (yes, even with DPA):

• Earnest Money Deposit
  Secures the contract — typically $500 to $2,000 depending on the offer and area.

• Home Inspection(s)
  Not required by lenders but highly recommended. Costs vary but generally range from $300–$600, paid out-of-pocket.

• Appraisal Fee
  Required to confirm home value — usually $500–$700, also paid upfront.

• Foundation Inspection (if buying a manufactured home)
  Costs around $500–$650, and may be required for final loan approval.

💡 Tip: Always use a cashier’s check or card — no cash — and save your receipts. These costs can sometimes be applied to closing, but only with documented proof.

🧾 Step 6: Final Processing & Underwriting

After inspections and appraisal, we’ll finalize your file and submit to underwriting. We'll gather:

• 2 months of bank statements

• Updated pay stubs

• ID and employment contact

• Address history

• Written explanations if needed

The more complete your file, the fewer “conditions” you’ll face — and the faster we close.

✍️ Step 7: Closing Day

We’ll send your final loan figures about 24 hours before closing. You can:

• Wire the funds

• Or bring a cashier’s check made out to the title company

I do my best to attend every closing — and if I can’t be there in person, I’ll be on standby for any last-minute questions. This moment is too important to go it alone — and with us, you never will.

🏠 Final Thoughts

You’ve got dreams. We’ve got a roadmap.

Whether your biggest fear is your credit score, your savings, or just “not knowing where to start,” we’re here to break it down and walk beside you from pre-approval to keys in hand.

📍 Proudly Serving All of Michigan
💬 Start Your Free Mortgage Consultation Now
📱 Text or call Angie anytime at (616) 581‑6123